Should I Franchise My Business?
"If you want to expand, but lack the money, the people and the time, it may be time to think about franchising." So states Mark Siebert in this article in Entrepreneur.com. He continues:
“Franchising is a relatively flexible format, and just about any type of business can be franchised, provided it meets some basic characteristics:
• It needs to be credible. Does your company have experienced management? A track-record over time? Is the concept proven? Have you achieved good local press or public acclaim?
• It needs to be unique. Is your business adequately differentiated from its competitors? Is it marketable as a business opportunity? Does it have a sustainable competitive advantage?
• It needs to be teachable. Are the systems in place? Are operating procedures documented? Could someone learn to operate your business in three months or less?
• It needs to provide an adequate return. I don't mean just profitability. If a business can't generate a 15 to 20 percent return on investment after deducting a royalty (typically between 4 and 8 percent), it's going to have difficulty keeping franchisees happy.
If your business meets these criteria, then it may be a good candidate for franchising.”
